Buccaneer Energy Provides Southern Cross Unit Operations Update

Buccaneer Energy Limited provides the following update on the progress of drilling operations at the Southern Cross Unit.

As previously advised, on installation of the 30” diverter and well control equipment on the conductor pipe, some settling of the rig’s legs into the seabed was noted.

Side scan sonar was used to evaluate the seabed conditions and evidence of movement of sand behind and around the bottom of the rig legs (“scouring”) was observed.

Although a new drilling location 450’ to the southeast of the original drilling location was promptly identified, surveyed and cleared with regulators, given the limited drilling window before the end of the summer drilling season, the Company has mobilized the rig to Port Graham on the western side of the Cook Inlet three weeks earlier than planned.

While there, the rig will undergo minor winterization work and annual hull inspections prior to moving back to the Cosmopolitan Project. The summer drilling season ends October 31, a date established by the Alaska Department of Environmental Conservation (“ADEC”).

The Cosmopolitan Project is located in the southern reaches of the Cook Inlet and is considered ice free during winter. On completion of the work at Port Graham, the Endeavour will be mobilised to the Cosmopolitan Project location to drill and additional 1-2 wells during the remainder of the 2013 / 2014 winter.

It is expected that the Endeavour will be moved to the Cosmopolitan location in late November 2013; the Company is working to secure final permits necessary to spud the Cosmopolitan # 2 well.

The Company obtained two of the four leases within the Southern Cross Unit through a farm-out from Chevron Corporation in 2010; Chevron’s Cook Inlet assets were acquired by Hilcorp in 2011. All the conditions of this farm-out agreement have been met, with the exception of drilling a well to 8,500’ vertical depth, the Company has commenced negotiations with Hilcorp in respect to renewing the farm-out agreement on these affected leases.

Additionally, the Company has commenced negotiations with the Alaska Department of Natural Resources (“DNR”) in respect to the Unit Agreement that encompassed the Southern Cross Unit project and which expires on 31 October 2013.

If the above negotiations can be successfully concluded, the Company will seek to schedule the drilling of the Southern Cross Unit # 1 well into the 2014 summer drill season that commences on 15 April 2014.

The Southern Cross Unit is currently 100% owned by the Company. The Company has executed a farm-out agreement with Los Angeles based EOS-Petro, Inc. (“EOS”) where EOS will earn a 50% working interest by paying 100% of the well costs of the first two wells at the Southern Cross Unit, including the Southern Cross Unit # 1 well.

Press Release, October 11, 2013


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